The economic slowdown has impacted the outsourcing business and eroded margins, with contracts shrinking by the day. But business process outsourcing BPO units have found a new torch in these dark times in clinical data management.Major BPOs such as Tata Consultancy Services TCS BPO, Satyam BPO and the BPO divisions of Accenture and Cognizant are betting big on clinical data management in these uncertain times. They believe that this business will continue to grow despite economic headwinds.
V K Raman, the head of TCS BPO, sees tremendous opportunity for the company to grow in this space. Both global and Indian pharmaceutical companies are looking for outsourcing prospects with companies that can be trusted, he says.
Clinical data management is a part of the process to bring new drugs to the market. It is part of the clinical trials process and involves collecting data from a large set of patients, analysing it, validating it, and arriving at clinical interpretations.
As it is highly technology driven and needs the use of IT systems, pharmaceutical companies outsource it to BPOs and IT companies.
According to Kishan Bhat, engagement manager at Bangalore based consulting firm Zinnov Consulting, more clinical data will be outsourced to India as the cost differential is as high as 65 percent.
The economic conditions are only helping India in this case, feels J Sairamkumar, practice leader life sciences, Cognizant. It is felt that in difficult economic times, clients are likely to outsource more to India to get more work done in a lower budget, he says.
Estimates say Indian pharmaceutical companies too stand to save 30 to 35 percent if they outsource such work to BPOs.
For outsourcing companies, the potential is huge, as consultancy firm McKinsey & Co says pharma companies in the country are planning to spend about USD 1.5 billion on clinical trials by 2010. So this means huge business for us, says P G Raghuraman, lead delivery centres for BPO, Accenture India.
The last two quarters of FY09 have seen an increase in demand from clients. This is due to the increase in stringent norms by the US Food and Drug Administration USFDA, which has increased the scrutiny on global pharma majors, he says.
Sairamkumar adds that the healthcare and life sciences business, of which clinical data management is a major part, contributes 24 percent to Cognizants revenues.